KIIT University 2008 B.Tech Electronics and Tele-Communication Engineering ENGINEERING ECONOMICS - Question Paper
FIFTH SEMESTER exam
ENGINEERING ECONOMICS
--- HU 501---
FIFTH SEMESTER EXAMINATION-2008 ENGINEERING ECONOMICS
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Engg. Eco H\J 501 (CE, CSE, E&EE, E&TC) |
Time: 3 HoursFull Marks: 70
Answer any SIX questions including Question No.l which is compulsory.
The figures in the margin indicate full marks.
Candidates are required to give their answers in their own words as far as practicable and of all parts of a question should be answered at one place only.
[2x10
1. a) Given the demand function p = 40-x
(where x=output, p=price)
Find the value of x for which elasticity of demand ep=1.
b) Mention four factors which affect the elasticity of demand for a commodity.
c) What is meant by bank rate?
d) The number of repairs produced by a computer repair shop depends on the no. of workers as follows:
No. of workers (per week') No.of repairs
0
1
2
3
4
5
6 7
0
8
20
35
45
52
57
60
Add two additional columns to the table and enter the marginal and average product of each no. of workers,
e) Show how under perfect competition price, AR and MR lines coincide.
(1)
A
KIIT-U/2008/Autumn End Semester Examination-2008
Sports cycle ltd faces a horizontal demand curve. The firms total cost TC is given by the equation TC = 200 + 150Q - 20Q2 + Q3. What is the price below which the firm is forced to shutdown its operations?
g) From the following data find the PA/ ratio.
Total Fixes Cost = Rs. 12000
Selling Price = Rs.12 per unit Variable Cost = Rs.9 per unit
h) What do you mean by single payment compound amount factor?
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i) Determine the present worth of the following cash flows based on an interest rate of 10%. | ||||||||||||||
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j) Explain the straightline method of depreciation. |
a) Prove that by point method the price elasticity of demand is
_ lower segment upper segment
b) If one firm, seven peasants and three tons of fertilizers yield 1000kg of potatoes while one firm, seven peasants and four tons of fertilizers yield 1300kg of potatoes, Find the marginal product of fertilizers.
c) If cost function is given by
1
c = 100 + lOOx - 50x2 + -x3
(i) Find the marginal cost (MC) and slope of MC.
(ii) Value of x where MC=AVC
a) Given the following information:
Selling price = Rs.150 per unit Variable cost = Rs.90 per unit Fixed cost = Rs.600000 (total)
(i) What is the break even point?
(ii) What is the selling price per unit if break-even point is 12000 units?
b) How will you define economies of scale? How do r* economies of scale affect the return to scale?
c) Newspaper reports show that mango harvest has n increased this year (May 2008) i.e. supply of the good is enormous. In response the price was expected to fall and
it was reported that price has fallen from Rs.28 to Rs.14. Explain the above situation graphically.
a) Following diagram shows the cost structure of a monopoly firm as well as market demand. Identify on the graph and calculate the following:
[2
(i) Profit maximizing output level
(ii) Profit maximizing price
(iii) Total revenue and Total cost
(iv) Total Profit/Loss
output
b) Indicate whether you agree or disagree with the following statements. Briefly explain your answers.
(i) Firms that exhibit constant return to scale have U-shaped long run average cost curve.
(ii) The supply curve of a competitive firm is its MC curve above average Total cost curve.
(iii) A firm suffering losses in the short run will continue to operate as long as total revenue will at least cover fixed cost,
c) A firm produces q units of computer key boards per month. Its monthly production cost is Rs.(q2+64q+1000) while it
where p is the
Price. Find the profit maximizing price and output.
0)
a) Project X costs Rs.2500 now and is expected to generate year end cash inflows of Rs. 1000, Rs.900, Rs.800, Rs.700, Rs.600 in years 1 through 5. The opportunity cost of capital is 8%. Calculate the Net present value of the project and decide whether it adds to the wealth of the owner or not.
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b) Given the following data of demand figures (y) over the years, fit a straightline trend by the method of least square. Also find the value for the year 2008. | ||||||||||||||||
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6. a) Briefly explain three quantitative methods of controlling
inflation adopted by central bank.
b) What is inflation? Explain the concept of demand pull inflation.
c) Let the initial cost of an equipment is Rs. 15000 with the estimated life of 3 years. The equipment will yield cash in flows of Rs. 10,000, Rs.8000, Rs.6000 over three years of its life. Determine the internal rate of return by trial and error method.
7. a) Explain the agreement between NPV and IRR. [4
b) A person wishes to have a future sum of Rs.500000 for [2 his sons education after 10 years from now. What is the single payment that he should deposit now so that he gets
the desired amount after 10 years? The bank gives 7% rate of interest compounded annually.
c) The initial cash outlay of a project is Rs. 100000 and it can [4 generate cash in flow of Rs.40000, Rs.30000, Rs.50000,
Rs.20000 in years 1 through 4. Assuming rate of interest at 10%. Find the profitability index and indicate whether the project is worth taking up or not.
8. a) Explain the following methods of calculating depreciation. [2+2
(i) Sum of years digit method
(ii) Declining balance method
b) The initial cost of an equipment is Rs. 1100, salvage value [3+3 is Rs.100, life of the equipment is 5 years, calculate the yearly depreciation and book value by the sum of years digit method and percentage on book value method, xxxxx
?/IT (//200%/Auiumn End Semester Examination-2008
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